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Tesla, Inc. (NASDAQ:TSLA) stock plunged on Tuesday, dragged by the company's fourth-quarter deliveries miss. Prominent Tesla bull and Wedbush analyst Daniel Ives offered his take on the sell-off and what lies ahead for the electric vehicle maker.
Black Cloud Forms: The 12%+ plunge on Tuesday was clearly an “ominous” start to the year after a horrible 2022, with a black cloud now forming over the story, Ives said in a note.
See Also: How Did Elon Musk Make His Money
The major worry for Tesla now is the demand slowdown in China at a time domestic upstarts Nio Inc. (NYSE:NIO), XPeng Inc. (NYSE:XPEV), BYD Manufacturing Company Limited (OTC:BYDDY) (OTC:BYDDF) and others are breathing down its neck for a smaller pie, the analyst said.
Given China represents over 40% of Tesla’s global growth story, Ives sees the weakness in the country as a major concern for the Street. The company may have to announce a significant price cut to gain market share in a darker macro backdrop, he added.
Ball In Musk’s Court: The current scenario, according to Ives, is a fork in the road for the company that will either lay the groundwork for its next chapter of growth or continue its slide from the top. Despite China head Tom Zhu taking a bigger role at Tesla, CEO Elon Musk must take a more hands-on approach in 2023, given the Twitter distraction and the current demand situation are creating perfect weather for the stock.
“Musk controls the fate of Tesla, this is a moment of truth for Musk to navigate the damage control now.......or the brutal pain will continue,” Ives said.
The analyst maintained an Outperform rating and a $175 price target for Tesla shares.
Price Action: In premarket trading on Wednesday, Tesla shares were rising 1.82%, to $110.07, according to Benzinga Pro data.
Read Next: Tesla's Aggressive Price Discounting May Have Hurt Gross Margins By This Much In Q4
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
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